China may raise target for new loans to $1.7 trillion in 2013

BEIJING (REUTERS) - China's central bank could target 9 trillion yuan (S$1.7 trillion) in new local currency loans in 2013, up from an expected 8.4-8.5 trillion yuan this year, the Bank of Communications (BoCom) said on Wednesday.

"We expect the targeted new renminbi (yuan) loans for 2013 will be 9 trillion yuan, but the actual new loans could slightly exceed the target," the country's fifth-biggest lender said in a research report, released at a news conference.

"Demand for loans in the real economy could show steady growth. We expect the new government to unleash new investment plans, which will boost credit demand," BoCom said, adding that it was unlikely that the central bank would ease policy aggressively next year.

There was even a risk that interest rates would rise towards the end of next year, if an anticipated rebound in economic growth combined with a fresh rally in commodity prices to ignite inflation, BoCom chief economist, Lian Ping, told Reuters.